Accuracy of rail-tax revenue in doubt

Gov. Linda Lingle questioned yesterday the accuracy of the city administration's projections of how much money it will receive to pay for a rail-transit system.

The governor said she received a copy of a critical letter from the Council on Revenues that questioned the city's revenue projections. The panel projects state revenues from different sources, including the 4 percent general excise tax.

"So what the (Council on Revenues) is saying in this letter to the mayor and the (City Council) chairman is that if your representatives were accurately quoted, then what they said is not true because they (the Council on Revenues) don't make projections for the city, they don't make it on a county basis and they don't make it over that period of time," Lingle said.

Requests for a copy of the letter made to Council on Revenues Chairman Paul Brewbaker and the Lingle administration were not answered. An aide to Council Chairman Donovan Dela Cruz said the letter has not yet been received, and members of the Hannemann administration said the mayor has not received the letter, either.

"I think it's important throughout this process that there be good, accurate information given to the public, whether it's about routes or taxation or the federal funds we might expect to receive," Lingle said. "I think we really need to make certain we do our best to get the best, most accurate information possible."

Beginning Jan. 1, the GET goes up to 4.5 percent on Oahu, with the additional 0.5 percent going to finance constructing a new mass-transit system for Oahu. The city estimates that it will receive a little more than $3 billion from the new tax over a 15-year collection period that ends in 2022.

A study completed earlier this month supported the city moving forward with either a 20- or 28-mile rail line. The cost would range from $3.2 billion to $6 billion depending on the route and if bus expansion costs were added in.

Toru Hamayasu, the city's chief transit planner, said the letter is in apparent response to something he testified to before the Council.

He explained yesterday that the city studied three different revenue projection scenarios and chose the "middle of the road" scenario that is based on past general excise tax collections and future Council on Revenues projections through June 30, 2013, extending that same level of projected growth through 2022.

Hamayasu said the figures the city is using for transit revenue do take into account that the transit tax would apply only on Oahu and that the numbers do not include the 10 percent taken by the state for administrative costs.

"This revenue estimate is as realistic as anybody can get at this point," Hamayasu said. "So the Council on Revenues objections are well taken, and we have already considered it."

City spokesman Bill Brennan said the Alternatives Analysis study completed last week does contain accurate information.

"Definitely," Brennan said. "The definitive revenue picture is in the Alternatives Analysis."